Author: admin

Due diligence is the legal term for a wide variety of searches and inquiries undertaken before entering into a legal contract. In short, it means doing your homework in order to protect yourself. In commercial real estate leasing, this involves investigating a range of issues connected with the lease, the building, and the landlord or leasing company. All information gathered in this process can materially influence the tenant’s decision on a lease of real property.

One component of due diligence related to leasing property includes an onsite inspection to help assess the overall condition of the property. Taking an inventory of everything from wall conditions and water spots, to obvious foundation cracks will allow the tenant to know if repairs are needed. The ventilation, air conditioning and heating equipment can be a major expense for a tenant which can be impacted by each system’s age and whether it is under warranty. Checking maintenance records and thoroughly reviewing any proposed contracts will clearly identify which party has responsibility for repair or replacement of every element or system belonging to the property. At some point any commercial property will need to be repaired. One way to avoid costly surprises when systems need to be replaced is to have your real estate attorney from Hecht Walker review the lease to make sure you are fully protected and understand each party’s responsibility.

Start From Square One with Measurements

Due diligence should also determine the square footage in any commercial lease. Many sellers or property owners fail to specify an exact property size, even when charging tenants per square foot. By taking measurements, taking photos and notes to document the conditions of the premises, a prospective tenant will clarify potential issues and have proof that the issues existed prior to occupancy.

Property usage is another factor in due diligence. Many tenants do not realize that a property owner has the power to rent out spaces to competitors, which can adversely affect business success. The language of the lease contract can often be negotiated to include a no-competition clause to prevent the landlord from leasing nearby property to another company that sells the same type of services or products.

Get It in Writing Before Signing

According to Jon Jordan, Partner at Hecht Walker, “The most important thing related to Due Diligence from a legal perspective is to make sure all parties thoroughly read and completely understand all of the provisions and real and potential ramifications of the legal contract before signing on the dotted line.”  His advice, “If there are provisions that you don’t understand make sure you seek guidance from a legal professional to help you before you sign the lease.” Once any commercial lease contract is signed, it may be too late to negotiate additional changes.  Consulting with a real estate lawyer at Hecht Walker to assist with the due diligence process before entering into a commercial lease with another party will help keep you protected.

Issue Number 2, March 2014

March into Peak Real Estate Season

At this time of year particularly in both the residential and commercial arenas, there is a lot of real estate activity. Title headaches, boundary line disputes, quiet title and deed issues occur in greater numbers.

Whether your real estate transactions are commercial or residential, Hecht Walker is ready to help you resolve any title issues or disputes that may interfere with or hold up your real estate closings.

How to Reduce Your Attorneys’ Hours in 2014, Part 2

An Interview with Greg Hecht, Esq. and Mark Walker, Esq.
Part two of a two part article.
Advice from attorneys Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, for the new year for businesses, local governments and other entities.

For Builders,  Developers and Purchasers

Builders, developers and purchasers of real property should work with cities and counties before buying property to determine if there are any local issues that will make permitting a problem, and to see if the design standards for the area are appropriate for the intended land use. Also, they should ensure that purchase contracts are contingent upon zoning appropriate for the property being purchased. Never count on a re-zoning to occur after the purchase. Once they  purchase the property, developers are stuck with the zoning in place at the time. In addition, if a change in the use of the property is planned, developers may lose any vested rights previously grandfathered for the property.

Also, it is important to check whether a potential purchase is within an overlay district. Overlay district designs and other requirements may destroy a proposed development and building budget as well as its proposed use. A developer can include a provision in the purchase agreement requiring the seller to materially represent that the zoning, design standards and district requirements are appropriate for the intended use, which should be spelled out in the contract. They should also be sure to have the latest set of covenants before entering into the Purchase and Sale Agreement.

Finally, builders should ensure that their workforce is I-9 compliant before entering a new jurisdiction. This includes determining whether the state has implemented a new work force development or workforce status check law. A project may not be feasible if the work force does not meet a local jurisdiction’s new work force development or status check law. (Read the Full Article)

Commercial Insurance and the Insurer’s Duty to Defend
By Joseph Cloud, Associate
Businesses have many different types of insurance policies available to them that cover all types of eventualities and losses. With the exception of automobile insurance, all commercial insurance policies are treated in largely in the same manner under Georgia law. Because an insurance policy is a contract, the language of the insurance policy controls what is covered under the policy. The common element to all commercial insurance policies is that they cover a business in case of particular types of loss or damage as defined by the policy.  Regardless of the type of insurance policy a business is making a claim under, whether Commercial General Liability (CGL), Professional Liability Insurance, or other policies covering specific circumstances or type of injury, you must first look to the language of the policy to determine what duty the insurer has to the insured.

In addition to covering certain types of claims, injuries, and damages, many commercial insurance policies include a separate “duty to defend” covered or potentially covered claims made against the insured. The extent of the insurer’s duty is determined by the contract.Loftin v. United States Fire Ins. Co., 106 Ga. App. 287 (1962). This is not an independent duty of insurance carriers under Georgia law, but many insurance policies include provisions requiring the insurer to provide either a defense of any lawsuit or other claim made against the insured if covered under the policy, or reimbursement for the costs of a defense of a lawsuit or other claim covered by the policy. Unfortunately, many insurance companies will rely on any rationale or possible exclusion in the policy to deny an insurance claim or to avoid providing for the cost of a defense of a lawsuit. (Read the Full Article)

Part two of a two part article.

Advice from attorneys Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, for the new year for businesses, local governments and other entities.

For Builders,  Developers and Purchasers

Builders, developers and purchasers of real property should work with cities and counties before buying property to determine if there are any local issues that will make permitting a problem, and to see if the design standards for the area are appropriate for the intended land use. Also, they should ensure that purchase contracts are contingent upon zoning appropriate for the property being purchased. Never count on a re-zoning to occur after the purchase. Once they  purchase the property, developers are stuck with the zoning in place at the time. In addition, if a change in the use of the property is planned, developers may lose any vested rights previously grandfathered for the property.

Also, it is important to check whether a potential purchase is within an overlay district. Overlay district designs and other requirements may destroy a proposed development and building budget as well as its proposed use. A developer can include a provision in the purchase agreement requiring the seller to materially represent that the zoning, design standards and district requirements are appropriate for the intended use, which should be spelled out in the contract. They should also be sure to have the latest set of covenants before entering into the Purchase and Sale Agreement.

Finally, builders should ensure that their workforce is I-9 compliant before entering a new jurisdiction. This includes determining whether the state has implemented a new work force development or workforce status check law. A project may not be feasible if the work force does not meet a local jurisdictions new work force development or status check law.

For Commercial Real Property Owners and Real Property Taxpayers

Property owners should watch out for higher valuations in property tax assessments this year, as cities and counties will most likely be tightening down on capitalization rates this year.

Says Greg Hecht, “In our property tax appeal practice, we believe property tax appeals are still effective tools to control certain operating costs for your projects for up to three years in relation to property taxes. As the economy rebounds, our fear is that many property managers and real property owners may ignore appeals in the upcoming year. An increase in the fair market value in an assessment may or may not be justified. The valuation should be reviewed in relationship to the income produced by the property and against comparative sales over the last few years.

For Clients with Insurance Coverage Issues

Says Greg Hecht, ” In our insurance coverage practice, we find bad faith denials of covered claims on a significant basis.” Individuals and businesses with coverage disputes need to be their own best advocates first, by reviewing their policy documents. Insured companies and individuals should not simply accept an insurers initial denial of a claim based on coverage limitations or claimed provision restrictions, but should check their insurance policy for coverage provisions and declarations, and have them readily available for transmission back to their insurer.

For All Clients and Potential Clients

Finally, in 2014, after doing everything to protect themselves within the confines of everyday business practices, clients should resolve to have an attorney review documents and changes in practice at the outset. Having an attorney in the process at the early stages of a contract, negotiation or issue, can often prevent larger problems or losses. This step can go a long way towards protecting individuals and businesses from liabilities and higher attorneys fees down the road.

With over 75 years of concurrent legal expertise, Hecht Walker’s team of attorneys can help you plan for the future and protect you from liabilities. And if you are facing a legal dispute, we can aggressively pursue your claims and your defense from any claims.

How to Reduce Your Attorneys’ Hours in 2014, Part 1

The wide range of areas in which attorney Greg Hecht focuses include business, commercial and real estate litigation, county, city and authority representation, loan and guaranty litigation, commercial property tax appeals, commercial landlord/tenant, contract, zoning, land use and employment law. In his more than two decades of service, Greg has been lead counsel in over 1000 hearings and over 300 trials, working tirelessly to achieve success for his clients.

Attorney Mark Walker is a partner at the law firm of Hecht Walker. In close to 30 years as an attorney, he has represented banks, creditors, lenders, landlords and businesses in commercial foreclosure actions, in lender liability matters and in bankruptcy proceedings. Mark has handled thousands of commercial foreclosure matters during his career, and has represented lenders and creditors in federal bankruptcy courts.

Issue Number 1, January 2014

Welcome to our newsletter!

The attorneys and staff of the Law Offices of Hecht Walker are pleased to announce the inaugural issue of our monthly newsletter.

How to Reduce Your Attorneys Hours in 2014, Part 1

An Interview with Greg Hecht, Principal and Mark Walker, Principal
Ever think youd be getting advice from attorneys on how you can reduce your attorneys fees? Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, offer advice for the new year for businesses, lenders, local governments, employers, landlords, tenants and other entities they routinely counsel.

We definitely want our clients to save money, time and headaches by utilizing ongoing diligent business practices to avoid unnecessary lawsuits and financial risks. Of course we also hope our clients know that when they do need our services, we are ready to help, says Greg Hecht.

Attorney Mark Walker suggests clients involve legal counsel early in the process. “Anytime you have something new going on, it never hurts to give your lawyer a call. Often, clients wait until things get out of hand to involve an attorney to try to save a little money. Better to know up front how to avoid expensive mistakes than to hire an attorney to clean up after a situation explodes.

Easing the Taxing Costs of Property Ownership

By Jon W. Jordan, Principal

Owners of real estate, whether residential or commercial are taxed for buying their property, selling their property, and even for simply owning their property. Each year around November, property owners receive a bill for ad valorem taxes on their real property. This bill is a combined tax assessment made by the State of Georgia, the County where the property is located, and in some instances the local municipality as well.

Unlike income taxes which are based upon verifiable data, ad valorem property taxes are often based upon a property valuation opinion made by a panel of taxpayers summoned to serve on the County Board of Tax Assessors. Often times, these opinions are based upon generalized assessments of the type of property being taxed and the general location of the property, without knowledge or consideration of the particular characteristics and condition of the property. After all, local governments simply do not have the resources to make individualized assessments of each and every property in the County before each tax assessment every year. As such, it is up to the taxpayer to ensure that his/her properties are valued and taxed properly. Otherwise, the taxpayer could risk overpaying the government thousands if not tens of thousands of dollars each year.

WHAT IS FAIR MARKET VALUE?

The Georgia Department of Revenue has established guidelines to assist County Tax Assessors with determining property values. Georgia statute defines a propertys fair market value as the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arms length, bona fide sale.

Creditor Representation

By Mark Walker, Principal

One of the many areas of law practiced at Hecht Walker is creditor representation. Though this area of law is by no means glamorous nor subject to much conversation at social events, it can be satisfying if done properly. Principals at Hecht Walker have decades of experience in creditor representation.

In simple terms, creditor representation is attorney representation of a client, such as a financial institution, credit company, individual, private entity or private investor, in the collection of debt owed to the creditor. This representation includes representing the lender in:

• bankruptcy
• real property foreclosures
• suing on Notes
• personal property foreclosures

This representation can include several other remedies available under Georgia law that allow the creditor to either regain its collateral which secures the loan, or alternatively, regain the funds loaned back from the borrower.

When a law firm is retained for this purpose by the creditor, the first step for the attorney is to review the creditors documentation to ensure that the creditor is a proper position to enforce the debt instrument. (Read the Full Article)

For Employers, Managers, Landlords, Property Managers, Tenants, Counties, Cities and Local Government Authorities

Ever think you’d be getting advice from attorneys on how you can reduce your attorneys’ fees? Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, offer advice for the new year for businesses, lenders, local governments, employers, landlords, tenants and other entities they routinely counsel.

“We definitely want our clients to save money, time and headaches by utilizing ongoing diligent business practices to avoid unnecessary lawsuits and financial risks. Of course we also hope our clients know that when they do need our services, we are ready to help, says Greg Hecht.

Attorney Mark Walker suggests clients involve legal counsel early in the process. “Anytime you have something new going on, it never hurts to give your lawyer a call. Often, clients wait until things get out of hand to involve an attorney to try to save a little money. Better to know up front how to avoid expensive mistakes than to hire an attorney to clean up after a situation explodes.

Going into 2014, here are some specific suggestions for the New Year from Hecht Walker:

For Employers and Management

People respond across the board to positive interaction, clear and consistent management, and timely feedback.  In regard to management practices when an employer conducts candid performance evaluations with each employee every six months and files them in the employee’s file, performance improves and mistakes are reduced. Says Hecht, “When you ensure that your team is reporting to you on a regular basis for project management, then problems can be addressed before they require the services of an attorney. ”

To motivate and help employees and team members stay on course and add strong value  to the team, the partners at Hecht Walker suggest giving positive, constructive feedback to team members on each project at regularly scheduled project status meetings.

Every business and individual will face challenges. The key is to point out the problems and solutions to the entire team without singling out a particular team member. The individual team member may be addressed in private between manager and team member. The purpose of team-wide problem identification and solutions is not to place blame on one person, but to prevent the problem from being repeated system-wide. Hecht’s advice, Keep your team motivated to pay attention to details. When one person does something well, complement him or her to the entire team but keep it in the context of a strong team success. Your company’s success starts with observant, hard-working team leaders dedicated to servant leadership principles. The example of a servant leader who promotes team success results in diminished liabilities and a bright future for your company or firm.”

Hecht has spent over 25 years in commercial, local government and employment law practice, and he has worked with businesses, financial institutions and government entities as an attorney, a business owner and as a legislator. Working with a variety of business owners, elected and appointed officials, and executives has allowed Hecht extensive insights into a variety of leadership styles. “I saw how many of our clients improved each year on their risk protection and how other companies continued to make the same mistakes, says Hecht, Good risk management practices can improve your bottom line and protect you from liability. It is very important  to address problems head on and expeditiously and to let the entire team know what mistakes are being made and how to avoid those mistakes in the future.”

For Landlords and Property Managers

Landlords and property managers will want to remember to ask for financial records of commercial tenants at least once a year, which should be provided for in the terms of the lease. Says Hecht, “We have seen many landlords and property managers forget to gain the tenant’s financials each year, despite the provision for such information being required to be provided annually in the lease. The financials can provide astute landlords and property managers with forewarnings of a potential default. This advanced warning may allow landlords and property managers to check with their brokers for potential replacement tenants before an inevitable default occurs. If the future defaulting Tenant knows that a replacement tenant is available or even likely available to take its place, the present Tenant is much more likely to work with the Landlord on an advanced resolution of its Lease Obligations without the Landlord having to pay an attorney to dispossess the Tenant and sue on the lease obligations.”

At Hecht Walker, we represent many Landlords and Property Managers, and we preach early meetings with Tenants who have bad financials. Burying your head in the sand can only lead to one result: hiring an attorney for dispossessory actions and lease and guaranty enforcement. Many of our clients who at first use us to litigate lease matters, return to us over and over, because we offer advice to save them money and protect their liabilities with time tested advice before the next dispossessory event occurs.

For those lessors who do not already have the annual financial statements provision contained in their leases, the attorneys of Hecht Walker recommend adding this provision in a renewal document or requiring a tenant to sign such an addendum at the time of acceptance of any late payment before agreeing to take the late payment. (You should also ensure that the lease contains a non-waiver of future defaults clause before accepting any late payment.) If the lease is not close to renewal and there is not a late payment involved, some tenants may be willing to give their financial information to the Landlord or Property Manager voluntarily pursuant to a non-disclosure agreement. Many tenants will expect such requests if there has ever been a prior late payment or even a non-monetary default.

For Tenants and Sub-Tenants

For all tenants and sub-tenants, it is advisable to inspect the leased premises every six months, especially the MEP systems – mechanical, electrical and plumbing. It is a good idea to follow up quickly with the landlord, property manager or sub-lessor when repairs are needed or appear to be needed shortly. Negotiations over potential repairs are much easier before a mechanical system fails than when a system goes down and the tenant’s business is affected. Many times, the tenant may request a landlord or property manager to check a system on a routine basis to avoid business disruption. A tenant may want to include such a provision in its lease.

Before putting a repair request in to their landlord, tenants should review their lease to make sure it is the landlord’s responsibility, as opposed to theirs, for repairs. If premises inspections are a routine, scheduled item each year, tenants can save themselves the headache of a business disruption issue that could require the services of a law firm such as Hecht Walker.

For Counties, Cities and Local Government Authorities

Officials and Managers for Georgia’s cities, counties and authorities should check revenue projections for accuracy on a routine and frequent basis. Most City and County Managers check with their CFO on a regular basis to determine the financial position of the local government. However, we have seen a lack of uniform financial review in some cases over the last 25 years. If revenue is not meeting the city or county budget for a quarter or for two consecutive quarters, consider making a mid-year adjustment in the budget. This strategy might forestall deficits.

Just as important to your bottom line is the economic development of your area. The economy is rebounding slowly, and competition for commercial tax dollars is heavy. Government entities should focus on being proactive to increase future revenues. This concept requires empowering your team and retention of your economic development directors. Elected officials maintain the best intentions of taking significant time with business leaders and targets to bring quality projects to their area, but the demands of real life and many other rigors of elected office make it impossible on your own to accomplish these time consuming transactions. Work with and through your economic development directors, your financial advisors, finance officers, attorneys and authority members to create one, five and ten year incentive plans and to assign tasks to build your team to attract quality commercial taxpayers. Economic development tools such as tax allocation districts, community improvement districts, zone allowances and other incentives are critical as well. If you plan for the utilization of the tools and the people on a comprehensive team, you will reap the rewards of properly contemplated commercial development.

And government entities should remember to include their constituents in this process, says Greg Hecht. “Public participation meetings can be very helpful in this area. They can go a long way towards generating support for and developing momentum behind future projects. If financial advisors outline the pros and cons of a tool, many citizen groups may even be apt to provide district wide support. Just make sure you do a lot of the hard work, research and planning early in the process.”

Adds Mark Walker, “I offer the same advice that we try to live by at Hecht Walker. Every attorney should be looking out for the client’s best interests but at Hecht Walker we are strongly committed to following our mantra: ‘Hard Work, Honest Work, Great Responsiveness, Great Results. These fundamentals are not just platitudes. These principles enable us to serve our clients best, and we know that our clients who practice and teach these principles are best enabled to succeed.”

The wide range of areas in which attorney Greg Hecht focuses include business, commercial and real estate litigation, county, city and authority representation, loan and guaranty litigation, commercial property tax appeals, commercial landlord/tenant, contract, zoning, land use and employment law. In his more than two decades of service, Greg has been lead counsel in over 1000 hearings and over 300 trials, working tirelessly to achieve success for his clients.

Attorney Mark Walker is a partner at the law firm of Hecht Walker. In close to 30 years as an attorney, he has represented banks, creditors, lenders, landlords and businesses in commercial foreclosure actions, in lender liability matters and in bankruptcy proceedings. Mark has handled thousands of commercial foreclosure matters during his career, and has represented lenders and creditors in federal bankruptcy courts.